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GEF vs. ATR: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Greif (GEF - Free Report) and AptarGroup (ATR - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Greif has a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #4 (Sell) right now. This means that GEF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GEF currently has a forward P/E ratio of 14.60, while ATR has a forward P/E of 24.69. We also note that GEF has a PEG ratio of 1.69. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ATR currently has a PEG ratio of 2.90.

Another notable valuation metric for GEF is its P/B ratio of 2.22. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ATR has a P/B of 4.20.

These metrics, and several others, help GEF earn a Value grade of A, while ATR has been given a Value grade of C.

GEF is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GEF is likely the superior value option right now.


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AptarGroup, Inc. (ATR) - free report >>

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